Libya’s NOC welcomes opening of ports, aims for 900,000 bpd

Libya’s state oil company said it welcomed the “unconditional” reopening of blockaded oil ports following a deal between the UN-backed government and an armed force which controls key facilities, saying it would begin work to restart exports from the terminals.

The agreement could be a major step in reviving Libya’s crippled oil output.

It had been questioned by National Oil Corporation (NOC) Chairman Mustafa Sanalla, who had warned against rewarding groups that shut down production and complained that the NOC lacked funds for its own operating budget.

In a statement sent to journalists, the NOC said the UN-backed Government of National Accord (GNA) had released money that would allow it to increase production by 150,000 barrels per day (bpd) within two weeks. The NOC said it aims to gradually increase output to 900,000 bpd by the end of the year.

Political disputes, conflict and security threats have slashed Libya’s oil production to less than a quarter of the 1.6 mbpd the Opec member was producing in 2011, before the uprising that toppled Muammar Gaddafi and sent the country into political turmoil.

Any recovery in production is expected to be gradual because of extensive damage to infrastructure, and continuing instability.

Details of the deal between the GNA and the Petroleum Facilities Guard (PFG) to reopen the eastern ports of Ras Lanuf, Es Sider and Zueitina, have not been made public, but the GNA said they included an unspecified amount for PFG salaries.

The statement from the NOC said Mousa Alkouni, a member of the GNA’s leadership or Presidential Council, had assured Sanalla that the ports would be reopened “without conditions”.

“There can be no backroom deals if we are to build trust. Any past salary payments to the Petroleum Facilities Guards need to be transparent, properly authorised and documented.”

He said the NOC would begin working with the Presidential Council and Libya’s eastern parliament so that exports from the blockaded ports could recommence.

“The NOC will immediately start technical works, and open discussions with our international oil company partners to indemnify the NOC from liability. We need the tribes in the oil producing areas to join our commitment to let Libya’s oil flow freely.”

Sanalla also called on groups preventing oil production elsewhere in Libya to let it resume, including some 470,000 bpd shut in from the Elephant and Sharara fields in the south-west.

“There are costs for them, too. Shortages of electricity, fuel, food and medicines in their regions are the direct result of their blockades,” he said.

After arriving in Tripoli in March, the GNA has been gradually trying to establish its authority and unify factions that set up rival parliaments and governments in Tripoli and eastern Libya in 2014.

But hardliners in the east, where most of Libya’s oil production is based, have prevented the parliament there from formally endorsing the GNA and have sought to export oil independently through a rival NOC in Benghazi.

The NOC in Tripoli said at the start of July that it had agreed terms for reunifying the corporation, though in recent days the chief of staff of armed forces allied to the eastern government threatened to target oil tankers that entered Libyan waters without permission from the NOC in Benghazi. — Reuters